Wednesday, November 01, 2006

Globalisation

Jason Haseldine August 2003

EXECUTIVE SUMMARY

This report researches the various definitions of the term globalisation. With over 1.7 million web pages associated with globalisation, there is little collective agreement as to its true definition. This paper identifies a series of definitions from organisations and individuals to form a basis of understanding.

In conclusion to the research undertaken, I have defined globalisation as the connectedness of economics, politics and culture though increased trade and financial flows, intertwined with the use of technology.

The second part of this report considers some of the arguments both for and against globalisation. The debates are strong and the quality of statistical data is high for both the “environmentalists” on the left and the “neoliberal capitalists” on the right.

Research has been conducted on a wide variety of sources to cover the globalisation debate. These views provide a balanced discussion of the various arguments to date. In conclusion, I believe globalisation must continue to ensure openness via reduced barriers and tariffs resulting in greater competition, better quality goods and services and a stronger economic climate. The growth in globalisation must be balanced to ensure protection of the environment and to take into consideration cultural sensitivities.

GLOBALISATION DEFINED

A search on www.google.com for the word globalization reveals in excess of 1.7 million pages associated with this term, as at 16 August 2003, yet there seems little collective agreement as to its true definition.

The term globalisation remains undefined in the most current print of the Oxford Thesaurus of English (2000). www.dictionary.com provides a basic macro definition of globalization via The American Heritage Dictionary of the English Language as: “to make global or worldwide in scope or application”. Held and McGrew (2000, p.3) state “No single universally agreed definition of globalization exists. As with all core concepts in the social sciences its precise meaning remains contested.”

Reich further supports the lack of definition of the term globalisation in his working paper, What is Globalization? Four Possible Answers, Reich (1998, p.4) states, “Despite the breadth with which the term has been applied, the meaning of globalization remains so elusive as to defy definition”. Reich recognizes four distinct approaches to globalisation: historical, economic, sociological and technological.

www.globalisationguide.org is a website constructed by a unit of the Monash University named the Australian APEC Study Centre. Here they describe globalisation as “a primarily economic phenomenon, involving the increasing interaction, or integration, of national economic systems through the growth in international trade, investment and capital flows. However, one can also point to a rapid increase in cross-border social, cultural and technological exchange as part of the phenomenon of globalisation”.

The International Chamber of Commerce (2000) state, “Globalization is about worldwide economic activity - about open markets, competition and the free flow of goods, services, capital and knowledge.”

www.globalization.com (2003) defines globalisation at two levels: Firstly globalisation at the political and economic level refers to “the process of denationalisation of markets, politics and legal systems, i.e., the rise of the so-called global economy”. Secondly at a business level, “globalisation is whereby companies decide to take part in the emerging global economy and establish themselves in foreign markets”.

www.globalization.about.com (2003) discusses globalisation as the increased flow of information, money and travel and highlights the term globalisation being the preferred term of describing the current times.

Guillen (2001) quotes several authors when establishing what is globalisation: “globalization is a process leading to a greater interdependence and mutual awareness (reflexivity) among economic, political and social units in the world, and among actors in general”.

Based on my research identified above, I identify globalisation as the connectedness of economics, politics and culture though increased trade and financial flows, intertwined with the use of technology. Globalisation is about change, and people’s acceptance of change within today’s society.

THE GLOBALISATION DEBATE

The debate over globalisation exists between the “environmentalists” on the left and the “neoliberal capitalists” on the right. The International Monetary Fund (2002) state how “Some view it as a process that is beneficial—a key to future world economic development—and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases inequality within and between nations, threatens employment and living standards and thwarts social progress”.

The Globalisation Guide.org (2002) states, “The WTO argues that the growth of trade between countries increases the wealth of everyone. Trade allows the production of goods and services by those who are most efficient, thus maximising their availability at the best price…The growth of trade is helped by the lowering of barriers, such as tariffs and import quotas.”

In contrast to the WTO, a recent study (The Centre for Economic and Policy Research 2001) identified a very clear decline in progress over the past 20 years compared with the previous two decades, further, they maintain there is no evidence in the data associated with globalization to indicate improved outcomes for the low to middle-income countries.

A study (International Chamber of Commerce 2000) identifies how globalization has increased the living standards of the world’s poorest people and lowered the level of world population living in poverty over the past 10 years. New research has also suggested that income inequality between rich and poor countries is diminishing.

Jorquera (2000) states, “Neo-liberal, market-first economic policies have spread to governments in every corner of the world. But the means by which these policies have been forced on the south…have generated economic stagnation, poverty and inequality. Sub-Saharan Africa, for example, spends more on servicing its $300 billion debt than it does on health and education for its children.”

Thomas Friedman is a three times Pulitzer Prize winner and international affairs columnist for the New York Times, his book the Lexus and the Olive Tree is a pro-globalisation text, he states “the driving idea behind globalization is free-market capitalism--the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be.”

Alternatively Mark Rupert a political scientist at Syracuse University has created the Anti Thomas Friedman web page and says “For starters, Friedman's book avoids contact with evidence or analysis as if these carried the Ebola virus. Readers may search in vain for a footnote, table, or chart; and there is no engagement with the vibrant scholarly literature on globalization. Instead, facile metaphors and platitudes are piled relentlessly one on top of the other, illustrated with anecdotes from Friedman's travels amongst the world's rich and powerful and (no kidding) corporate commercial advertisements.”

A report by (Herman 1999) identifies how globalization has been engineered by the corporate elites for their own interests and that globalization has been marked by substantial declines in rates of output, productivity, and investment growth.

The International Monetary Fund (2002) states “Countries that have been able to integrate are seeing faster growth and reduced poverty. Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards.”

The debate over the advantages and disadvantages of globalisation continues to flourish. The volumes of data, graphs and specialists reports can persuade either supporter to justify their position. Based on my research identified above, I believe globalisation must continue to ensure openness via reduced barriers and tariffs resulting in greater competition, better quality goods and services and a stronger economic climate. The growth in globalisation must be balanced to ensure protection of the environment and to take into consideration cultural sensitivities. BIBLIOGRAPHY

Held, David and McGrew, Anthony (2000), ‘The great globalization debate: an introduction’. In The global transformations reader; an introduction to the globalisation debate. Edited by David Held and Anthony McGrew. Malden Mass: Polity Press, pages 1-45.